As state and local departments of transportation (DOT), private developers and other infrastructure project owners begin navigating the $1.2 trillion Infrastructure Investment and Jobs Act, one thing is certain. The act represents a historic opportunity to embrace America’s future. It is the largest investment in U.S. public works since President Dwight D. Eisenhower’s Federal-Aid Highway Act of 1956 established the interstate highway system.
Looking to the future, the act provides long-term funding stability for the nation’s infrastructure. Passed with bipartisan support, the new legislation covers multiple sectors of the economy and provides roughly $550 billion in new spending over five years for core infrastructure priorities, including highways, roads and bridges; public transit; passenger and freight rail; ports and airports; broadband infrastructure; water systems; and the electric grid.
More than half of the act’s new spending — roughly $329 billion — is for projects affecting highways, public transit and rail. The act is intended to help generate employment and opportunities across the United States, in addition to reducing congestion, improving mobility, boosting quality of life, and making communities safer, more connected, and more resilient.
Increase the Likelihood of Funding
While this funding is a significant increase, it won’t meet the country’s infrastructure needs. Transportation spending under the act falls into two categories: formula and discretionary spending. Formula funds consider community needs and conditions in a standardized way. These funds are based on a variety of criteria — including population, miles of roadway and gas taxes collected — and are given to DOTs to fund priorities. Formula funds have increased by 25-30% when compared to funds available through the previous Fixing America’s Surface Transportation Act (FASTACT). Additionally, through the infrastructure act’s discretionary spending, more than $100 billion is available in competitive grants.
Inexpensive capital in the form of billions of dollars in low-interest loans is available through the Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing (RRIF) program.
Along with surface transportation funding, the Infrastructure Investment and Jobs Act invests $108 billion in public transit investments. In addition to more typical transit spending, including investments in new services and routes, the act provides climate-focused funding such as $5.6 billion for low- or-no-emissions transit buses and $5 billion for electric and low-emissions school buses.
Improve the odds of receiving discretionary funding, by considering projects outside of already funded state transportation improvement programs (STIP). Initiatives considered should be high-value projects that already include some preliminary planning, engineering, cost analysis and/or design. Good transportation project candidates will align with community and area priorities and focus on safety, equity and climate resilience. Examples include: carbon capture or carbon reduction; highway, street, road and rail safety; and transportation electrification (electric vehicles (EV) and EV charging station infrastructure).
Projects that align with the Biden administration’s Justice40 Initiative — which calls for 40% of federal investments in climate and clean energy to flow to disadvantaged communities — also stand a strong chance of securing funding.
Efforts should be made to expand the workforce as this massive infrastructure program rolls out. Mentoring and special training programs focused on engineering and construction jobs can provide opportunities to diverse groups and help alleviate a constrained talent pool. These training and mentoring programs potentially could be folded into funding requests.
Navigate the Process With Confidence
Counties, which own and operate 44% of public roads and 38% of bridges, will play a major role in the act’s investment. This is more than any other level of government. County, state and local projects that can demonstrate improved connectivity, equity and resilience — economic and/or environmental — will have a good chance of receiving funding. In particular, projects that are sustainable and can withstand climate extremes should be given a close, hard look. Projects reconnecting neighborhoods that have been cut off or divided by physical infrastructure will also likely be given significant consideration.
Although funding is spread out over several years, the amount of work that will need to be done is staggering. Partnering with a design-build firm that has multidisciplinary capabilities can lead to integrated, cost-effective project delivery solutions. Whether a project involves transportation, water, rail, broadband or energy, having a partner with experience addressing a variety of sectors is critical.
DOTs and other project owners should look for three key things when choosing a partner. Work with a firm that understands infrastructure holistically, from planning to design and construction. This includes knowing the ins and outs of environmental regulations and other factors that can quickly complicate projects and make them more costly. Second, find a partner that understands the stakeholders that will be affected by a project and how to connect with them. Remember, the more people positively impacted by an initiative, the better the chances of receiving funding. Finally, select a thoughtful partner that thoroughly understands the funding process and what opportunities exist for receiving federal support.
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This post is part of a series that dissects the Infrastructure Investment and Jobs Act and addresses potential impacts of it on industries and infrastructure projects across the country. Learn more from these posts: